Missing Women, Integration Costs, and Big Push Policies in the Saudi Labor Market

Abstract

In settings where social norms promote gender segregation, firms may find it costly to employ both men and women. These integration costs may hinder women's employment. We develop a methodology to test for the presence of fixed integration costs and estimate counterfactual women's employment at all-male firms where these costs bind. We apply our approach in Saudi Arabia and find that integration costs bind for the majority of firms. We show that Nitaqat, a gender-neutral quota program that incentivized the hiring of Saudi nationals at private sector firms, induced firms to integrate and dramatically increased Saudi women's employment. (JEL J16, J23, J71, M52, O15, Z13)